Item
1.01. Entry into a Material Definitive Agreement.
On
March 5, 2021, MGT Capital Investments, Inc. (the “Company”), a Delaware corporation, entered into a securities purchase
agreement (the “Securities Purchase Agreement”) with Bucktown Capital, LLC (the “Investor”), pursuant
to which the Company issued a convertible promissory note in the original principal amount of $13,210,000.00 (the “Note”).
The Note is convertible, at the option of the Investor, into shares of common stock of the Company (“Common Stock”)
at a conversion price equal to 70% of the lowest price for a share of Common Stock during the ten trading days immediately preceding
the applicable conversion (the “Conversion Price”); provided, however, in no event shall the Conversion Price
be less than $0.04 per share. Conversion is permitted any time after the earlier of (a) the effectiveness of a Registration Statement
on Form S-1 that covers the Common Stock issuable in in connection with the Note, and (b) September 5, 2021.
The
Note will be funded in tranches, with the initial tranche of $1,210,000.00 funded by the Investor on March 5, 2021 for consideration
of $1,000,000.00. Six subsequent tranches (five tranches, each for $1,200,000 and one tranche for $6,000,000) will be funded upon
the notice of effectiveness of a Registration Statement on Form S-1 covering the Common Stock issuable in connection with the
Note. Further, the final tranche requires the mutual agreement of the Company and Investor. Until such time as Investor has funded
the subsequent tranches, the Company will hold a series of Investor Notes that offset any unfunded portion of the Note.
The
Note bears interest at a rate of 8% per annum and will mature in twelve months. The Company may prepay all or any portion of the
Outstanding Balance of the Note in cash at any time in an amount equal to 110% of the portion of the Outstanding Balance the Company
elects to prepay. Upon the occurrence of an Event of Default, the Outstanding Balance shall immediately increase to 115% (in the
case of a Major Default), 110% (in the case of an Unapproved Restricted Issuance Default), or 105% (in the case of any Minor Default)
of the Outstanding Balance immediately prior to the occurrence of the Event of Default and the Outstanding Balance shall become
immediately due and payable in cash.
Apart
from an Event of Default, if the Company cannot obtain an effective Registration Statement before July 5, 2021, the Outstanding
Balance will increase by 5%, and increase by an additional 5% per month, (for up to a maximum of three months) until the Registration
Statement is declared effective.
Unless
specifically defined herein, the capitalized terms shall have the meanings as defined in the respective documents attached hereto.
A copy of the Securities Purchase Agreement, the Note and Form of Investor Note are attached hereto as Exhibits 10.1, 10.2, and
10.3, respectively, and are incorporated herein by reference. The descriptions of the Securities Purchase Agreement, the Note
and Form of Investor Note contained herein do not purport to be complete and are qualified in their entirety by the terms of the
Securities Purchase Agreement, the Note and Form of Investor Note attached hereto.